Options Trading Quiz

This options trading quiz asks about Greeks (option-price sensitivities), implied volatility (the movement assumption in option prices), option value and strategy structure. Pick an answer to see the explanation, work through the fixed question set and review your result. The quiz can highlight concepts to revisit. It cannot prove a repeatable trading advantage, approve you for derivatives trading or establish that a strategy suits your account.

What this quiz tests

The set contains 12 questions covering delta, theta, volatility, straddles, iron condors, covered calls, intrinsic value, gamma, cash-secured puts, max pain and put/call parity. These are questions about concepts, not changing market prices or current contract specifications.

Select an answer once per question. The correct choice and explanation appear immediately, and that choice stays locked for the attempt. Next advances the question; See Results finishes the final one. The results list missed answers, and Retake begins the same set again.

There are no ticker, expiry-date or premium-entry fields. The quiz does not adapt difficulty, generate market scenarios, rank you against other traders or store a learning history. Keep your own record if you want to compare attempts.

Quiz topics at a glance

The quiz has one fixed set of 12 questions and no beginner, intermediate or advanced levels. If you want to know which page to read when you miss a question, use this map.

The quiz is built for self-checking. It has no timer and no difficulty setting, and it does not store your history. Write down your score and the topics you missed somewhere you can find them, such as your own notes.

A score example and what it means

Suppose you answer 10 of the 12 questions correctly. The calculation is 10 / 12 × 100, rounded to 83%. Because the pass mark is 70%, this illustrative result passes. The level shown alongside the result is a label based on the score.

It is not a prediction that you will win 83% of trades. A retake also gives you prior knowledge of the questions, so a rising score can reflect remembered wording. Explain the reasoning without looking at the options to check whether you understand the concept.

For a missed item, identify the error category: definition, calculation, units or an unstated assumption. The options basics guide is a starting point when the terms in a question are unfamiliar.

Intrinsic value is different from profit

Intrinsic value is the exercise value implied by the underlying price and strike. For a call, it is the amount by which the underlying exceeds the strike, floored at zero. For a put, compare the strike with the underlying in the opposite direction. Profit also includes what you paid or received.

Consider a fictional purchased call with strike ₹100 and premium ₹8 per unit. Assume it reaches expiry with the underlying at ₹106 and an illustrative quantity of 20 underlying units. No real contract or current lot size is represented.

• Call intrinsic value = ₹106 − ₹100 = ₹6 per unit.
• Expiry P&L per unit = ₹6 − ₹8 = −₹2.
• Whole-position P&L = −₹2 × 20 = −₹40 before costs.

The call has positive intrinsic value while the purchased position has a loss. That is why in the money, meaning positive exercise value, does not mean profitable. This separate worked example explains the arithmetic behind option-value questions; the quiz itself is not a price calculator.

Read Greek questions with their assumptions

Delta describes premium sensitivity to a small underlying-price change. Gamma describes how delta changes as the underlying moves. Theta concerns time sensitivity. Vega concerns changes in implied volatility, the movement assumption reflected in option prices. These quantities describe different effects.

An at-the-money call, with strike near the underlying price, does not have a fixed delta. Its value depends on time, rates, dividends and the pricing model. A Greek is a local estimate with other factors held unchanged, rather than a promise of the next traded price.

Likewise, a volatility question assumes other relevant inputs remain unchanged. An option’s actual price can fall while the underlying moves favourably if other effects outweigh that movement. The guide to option Greeks explains how the sensitivities interact.

Ten sample options questions with answers

The questions below are practice questions written for this page. They are in the same style as the quiz but are not copied from it. Cover the answer and try each one first. Prices and strikes are made up.

• 1. A call has a strike of 24,000 and the index is at 24,150. What is its intrinsic value per unit? Answer: 150 points (24,150 − 24,000). Intrinsic value for a call is the amount by which the index is above the strike, never below zero.
• 2. A put has a strike of 24,000 and the index is at 23,900. What is its intrinsic value? Answer: 100 points (24,000 − 23,900). For a put, the strike must be above the index to have any intrinsic value.
• 3. You buy a 24,000 call for a premium of 120. Where is the expiry breakeven, before costs? Answer: 24,120 (24,000 + 120). Below that level at expiry you have a loss, even if the call finishes in the money.
• 4. In the previous question, the lot is 65. What is the most you can lose on one lot? Answer: 7,800 rupees (120 × 65), the premium paid, plus charges. A bought option cannot lose more than that.
• 5. What does a delta of about 0.50 on a call suggest? Answer: The premium moves by about 0.50 for a 1 point move in the underlying, all else equal. Delta is an estimate that changes as the market moves, and it is not an exact chance of finishing in the money.
• 6. Which Greek is the main reason a bought option can lose money while the index barely moves? Answer: Theta, the daily loss of time value. A fall in implied volatility can have the same effect.
• 7. You buy a 24,000 call at 100 and a 24,000 put at 90 (a long straddle). What are the two breakevens at expiry? Answer: 24,190 and 23,810, since the combined premium is 190 points (100 + 90). The index has to finish beyond one of them for a profit before costs.
• 8. Does a covered call remove the risk of the stock falling? Answer: No. The premium received cushions a small fall only. If the stock falls by more than the premium, the position loses.
• 9. State the put-call parity relation for European options in words. Answer: Call price minus put price equals spot price minus the strike discounted at the risk free rate, for the same strike and expiry. See the put-call parity page.
• 10. After a sharp fall in implied volatility, what usually happens to a long option's premium, all else equal? Answer: It falls. Vega is the Greek that measures this. A trader can be right about direction and still lose on a volatility drop.

The fastest way to learn from these is to make your own versions with different numbers. Change the strike or the premium and rework the answer. The options Greeks calculator lets you check delta, theta and vega for a given input.

Strategy names leave important conditions unstated

A long straddle combines a purchased call and put at a common strike and expiry. At expiry the favourable move must cover the combined premiums before there is a pre-cost profit. Saying that price moved a lot leaves the size of that hurdle unanswered.

A covered call combines stock ownership with a sold call. Covered describes the stock available against the call obligation; it does not remove losses on the stock. For a cash-secured put, reserved cash addresses the purchase obligation under the stated contract arrangement; it does not establish that the resulting investment is profitable.

A spread has several legs, or option components. Its combined payoff requires the correct buy/sell directions, matching quantities and matching expiry assumptions. The bull call spread example shows why premium per unit and total position amounts must be kept separate.

The quiz’s Max Pain label does not establish option sellers’ actual profits or forecast the expiry price. Its put/call parity question, about the relationship between call and put prices, gives a simplified formula. Put/call relationships require attention to dividends, financing, exercise style and matching contracts. Treat an abbreviated answer as the beginning of that check.

From a correct answer to a complete trade record

Knowing which volatility exposure a strategy has does not identify a universally suitable trade. An expected volatility fall can coexist with a large price move or an expensive exit. The question wording cannot account for your margin, liquidity, maximum acceptable loss or other open positions.

Before interpreting an expiry payoff, distinguish it from a sale before expiry and check settlement requirements for the actual contract. Do not transfer stock-delivery examples to index cash settlement without checking the product. This page does not supply current lot sizes, expiry rules or broker requirements.

When recording an actual option trade, note its underlying, type, strike, expiry, quantity, premium and costs, along with your reasoning. OneTradeJournal supports manual records and notes. A quiz result is a learning record; your trade outcomes are separate evidence.

India-specific options questions

Quiz questions about concepts are the same everywhere, but contract details are not. These are points that Indian option traders are often asked about. Use them as a checklist, and confirm each one on the exchange site before trading, since rules change.

• Nifty lot size. The Nifty lot is 65 in the NSE lot size file for the Nov-26 contracts. Bank Nifty is 30. Lot sizes are revised from time to time, so never trust a remembered number. See the F&O lot size and expiry calendar.
• Expiry days. Since 1 September 2025, NSE index and stock expiries fall on Tuesday. Nifty has weekly expiries, while Bank Nifty, Fin Nifty and Midcap Nifty have monthly expiries only. BSE uses Thursday, with weekly expiries for Sensex. If the day is a holiday, the expiry moves to the previous trading day.
• Stock option settlement. Stock derivatives have been physically settled since the October 2019 expiry, as set out by SEBI in circular SEBI/HO/MRD/DOP1/CIR/P/2018/161 dated 31 December 2018. That means an in-the-money stock option held to expiry leads to delivery of shares, not just a cash payment. Index options are treated differently, so check the contract page for each index.
• STT on exercise. If you hold a bought option to expiry and it ends in the money, securities transaction tax (STT) of 0.15% applies on the intrinsic value, paid by the buyer, since 1 April 2026. Selling an option to close the position before expiry is taxed differently, at 0.15% of the premium on the sell side. Because of this, many buyers close the trade before expiry instead of letting it exercise.
• Income tax. Profit and loss from options are generally reported as business income. Speak to a chartered accountant (CA) for how that applies to you.

Try making a question out of each point, such as: what is the cost of one lot of a 130 rupee Nifty option? The answer is 130 × 65 = 8,450 rupees, before charges.

Options quiz questions

What your score means and what to study next

A score tells you how many of the 12 questions you got right. It does not tell you how you will trade. Use it to choose what to read next.

• Under 7 out of 12: start with options trading basics and call vs put options.
• 7 to 9 out of 12: your basics are in place. Work on the Greeks with how to read option Greeks and understanding option premium.
• 10 or more out of 12: move to practical topics such as how to choose an option strike price and top mistakes options buyers make.

These bands are study suggestions made for this page. They are not the labels the quiz shows on its results screen. Most important is the list of questions you missed, because those point to the exact concept to revisit.

Can this quiz help with NISM exam practice?

It can warm you up on ideas such as intrinsic value, the Greeks and payoffs, but it is not a mock test for any exam. The NISM Series VIII Equity Derivatives Certification Examination is run by the National Institute of Securities Markets. NISM's page lists it as 100 questions of 1 mark each in 2 hours, with a pass mark of 60% and negative marking of 25% of a question's marks. Rules change, so confirm them on the NISM site and use NISM's official workbook for preparation.

This quiz does not follow NISM's syllabus and has no timer, negative marking or certificate. Use it as a light concept check and keep a separate record of your results.

Sources

• Options Industry Council: Option contract basics (checked 15 October 2026).
• Options Industry Council: Option delta and position direction (checked 15 October 2026).
• Options Industry Council: Option sensitivity to implied volatility (checked 15 October 2026).
• Options Industry Council: Long straddle structure and breakeven (checked 15 October 2026).
• Options Industry Council: Put/call parity assumptions (checked 15 October 2026).
• OneTradeJournal: Options Trading Quiz question set (checked 15 October 2026).
• Options Industry Council: Premium, intrinsic value and time value (checked 15 October 2026).
• Options Industry Council: Covered call stock exposure (checked 15 October 2026).
• Options Industry Council: Cash backing a written put (checked 15 October 2026).
• Options Industry Council: Gamma and changing directional exposure (checked 15 October 2026).
• Options Industry Council: Time sensitivity and non-linear decay (checked 15 October 2026).